COMMENTARY: When will emergency Covid-19 social grant reach poor families?
The South African Social Security Agency is facing an unprecedented challenge, setting up application, verification and payment systems for the new Covid-19 grant.
President Cyril Ramaphosa announced on April 21 that the government would pay temporary supplements to recipients of social grants and would also introduce a temporary ‘Covid-19 Social Relief of Distress grant’. This new emergency grant was aimed at people who are, in the president’s own words, “currently unemployed and do not receive any other form of social grant or Unemployment Insurance Fund (UIF) payment”.
This bold expansion of social grants — costing about 1% of GDP — placed SA at the forefront of international responses to Covid-19. While most countries around the world have reformed aspects of their social assistance systems, only ten countries have increased both coverage (or reach) and benefits (as of May 15, according to data compiled by the World Bank).
But announcing planned payments is one thing. Implementing the proposals and effecting payments to poor families is another.
Will the SA Social Security Agency (Sassa) succeed?
The emergency ‘Covid-19 Social Relief of Distress’ grant was announced on April 21.
Setting up application, verification and payment systems is a massive challenge. Payment requires unprecedented cooperation from banks (including the Post Office), mobile phone companies and retailers.
The application system appears to be functional. But the number of payments made is tiny.
South Africa lags behind Namibia in paying out emergency grants by a full month.
Two weeks ago, Sassa did effect the increased benefits to existing grant recipients, albeit in a chaotic manner. Last week, it opened the application process for the new emergency grant. The first payments were promised for Friday, May 15. I understand that Sassa has tested its payment system, but it is yet to announce that it has begun to pay the grant to the millions of applicants who need it.
The introduction of the new emergency grant poses an unprecedented challenge to Sassa. So far, the agency appears to be stumbling rather than striding boldly.
Sassa’s mantra is “Paying the right social grant, to the right person, at the right time and place”. Each of these will pose a separate challenge. Sassa must first identify who is eligible (who are the right recipients), then implement payment processes to pay the right amount to each verified applicant, and do so at the right time.
The right time is now. Friday May 15 was the first day of the eighth week of lockdown in SA. Many South Africans who had informal livelihoods have now been without income for almost two months.
Many others, who were already unemployed and dependent on others, may also be struggling because the earnings of those on whom they depend have fallen or stopped.
SA was already experiencing a food crisis before the lockdown, as civil society organisations involved in food supplies have emphasised. Now, these organisations estimate, perhaps half of the SA population needs food parcels — but deliveries are reaching only a small fraction of them. Moreover, millions of children are not receiving school meals, so the actual number of people receiving food is much lower now than it was before the crisis.
There also appear to be major administrative challenges and long delays in payments through the UIF. Even with the supplements to existing social grants paid out by Sassa two weeks ago, there is an urgent need for the new emergency grant to be paid out.
Some countries have done better than SA in rolling out emergency grants. It is hard to find data on actual payments but we have some data from neighbouring Namibia. Namibia’s ministry of finance paid its first ‘emergency income grants’ almost five weeks ago, on April 16, allowing people to access cash from ATMs almost immediately. By April 30, the ministry of finance had approved 576,000 applications, for one in every five people in Namibia; most of these had already received their payments. It should embarrass the SA government that, at this time of crisis, it is already more than one month behind its Namibian neighbour.
Sassa’s usual application process for a social grant is bureaucratic. Applicants go to their nearest Sassa office with the required documentation and lodge their application. Sassa, which has about 9,000 employees, has several hundred local offices in addition to its national, ‘regional’ (provincial) and district offices.
This process works reasonably smoothly with the usual flow of applications. In the first quarter of 2019, Sassa received just over 150,000 new applications for social grants per month, most of which were approved quickly. Because the process requires applicants to submit a range of documents, it excludes the significant numbers of potential applicants who cannot access them.
This is a bureaucratic process that cannot be scaled up rapidly to handle the expected millions of applications for the new grant. It is possible that the number of applications for the new grant will be 100 times as many as applications for all other grants in one month: fifteen million compared to 150,000.
Moreover, Sassa’s local offices — which were closed for the first seven weeks of the lockdown — are now operating with a skeleton staff (in line with social distancing regulations).
Sassa needed to establish an entirely different application process.
Even before President Ramaphosa’s announcement of the new grant on April 21, Sassa seems to have been developing new application and payment processes. Sassa’s senior manager in charge of grants administration told the parliamentary portfolio committee on social development on April 23 that the agency was already testing a new application system (via WhatsApp and Unstructured Supplementary Service Data [USSD] platforms) and was working on the payment system (through bank accounts, e-wallets or ‘cash-send’ phone-based mechanisms).
The application system “was supposed to have gone live” on May 4, according to a Sassa official. When Sassa conducted a new test of its WhatsApp and e-mail application processes, it received 91,000 applications via WhatsApp — at which point the system crashed — and 250,000 applications through e-mail. On May 6 Sassa had to announce that the system was not yet live. Finally, on May 11, the minister of social development and CEO of Sassa announced in a televised briefing details of how to apply, and the application process was opened.
Applications can be made through e-mail, WhatsApp or mobile phones through USSD codes. Applicants record their name, ID number and address, and confirm that they have no other income.
This process means no documents need be submitted. Even if the technology were to allow for documents to be attached to a phone-based application, Sassa lacks the capacity to check submitted documents.
Applicants experienced considerable difficulties. According to one account, none of the application mechanisms seemed to work reliably.
Despite these teething problems, President Ramaphosa stated in his address to the nation on the evening of Wednesday May 13 that three million people had applied for the new grant by that evening. The next day, Sassa released a statement recording the number of applications received via the different mechanisms each day since Monday. As many as 1.5 million applications were reportedly received on Monday, one million on Tuesday, just under half a million on Wednesday and just over half a million on Thursday. The total came to over 3.5 million. Two-thirds of the applications were made using USSDs, half a million through WhatsApp, the same by e-mail, with another 200,000 through the website.
Having received applications, Sassa must verify that the applicants are indeed eligible. The various application mechanisms generate data that should be easy to search electronically. There are six obvious government databases with which applications might be compared. Comparison with Sassa’s own database should reveal whether applicants are receiving any other grant. Comparison with the Home Affairs database (HANIS) will confirm that the applicant is eligible in terms of age and citizenship status. Comparison with the databases of the UIF, Government Employees Pension Fund (GEPF) and National Student Financial Aid Scheme (NSFAS) will reveal whether the applicant gets income from any of these sources. And, finally, comparison with Sars’ database of people registered for tax purposes will reveal if the claimant was until recently in formal employment and thus, at least, eligible for UIF support if he or she lost his or her income.
It will be extraordinary if these databases can be compared smoothly. As far as we know, there is no previous history of government databases ‘talking’ to each other. (Sassa’s CEO seemed to acknowledge this in the press conference on Monday May 11). We can expect many problems.
It has been reported that Sassa has proposed two other verification procedures. First, it seems that Sassa considered matching the cellphone number provided by an applicant against other government databases. According to one report, Sassa confirmed that any applicant who had previously provided one cellphone number to an institution such as Sassa Sars or the UIF and applied for the new Covid-19 grant using a different number, would be “kicked out” automatically. When I asked one Sassa communications official about this, she denied that Sassa would require matching phone numbers.
It was also reported that there would be some kind of check on how many applicants were received from each household or homestead.
Sassa CEO Memela has said that the new grant would be limited to two people per household. She also said that address details were needed “so that we can get a sense of how many people are applying in one particular homestead because that is going to be critical for us to keep control”. Again, when I asked one Sassa communications official about this, she denied that Sassa would limit applications per household or homestead.
The application form for e-mail applications requires that applicants consent to Sassa verifying information not only through other government databases, but also through data from financial institutions including “past and present bank accounts, stock holdings and any other financial records relevant to the application”. I imagine that accessing data from banks and other financial institutions could not be done on an automated basis but would need some human oversight, which is likely to be beyond Sassa’s capacity except in a small number of cases.
On May 1, Sassa said that the process from application to approval would take two or three working days. In its previous test run, Sassa found that about one in nine WhatsApp applications was invalid because the applicant was already receiving another grants. Half the email applications were invalid, though it was not entirely clear why. As early as Thursday May 14, a Sassa spokesperson reportedly said that as many as 60% of the first one million applications were from people who didn’t qualify, or were duplicates.
In Namibia, only 576,000 out of 970,000 applications were approved at first. The spokesperson for the ministry of finance attributed rejections to a string of reasons, including ID numbers belonging to dead people, and mismatches between names and ID numbers in applications and other official records. The Namibians then had to establish a procedure for unsuccessful applicants to demonstrate why they were eligible. Unsuccessful applicants were referred to district-level ‘verification centres’, usually constituency offices. Large numbers of people reportedly gathered at some centres, in glaring violation of social distancing regulations — prompting some criticisms.
Sassa has not shared details of any such confirmation or appeals procedure in SA.
Can Sassa deliver?
There are several reasons to worry about Sassa’s capacity to deliver grants as promised. We used to think that Sassa was an island of bureaucratic competence in a state that was otherwise marred by incompetence or state capture. The other state institution with a good reputation was Sars. We know now that both Sars and Sassa (and its parent department of social development) suffered serious decline in capacity when Jacob Zuma was president and Bathabile Dlamini was his minister of social development.
Sassa has had no fewer than ten CEOs or acting CEOs in the last ten years. In her final two years as minister, Dlamini got through six Sassa CEOs or acting CEOs. Turnover has not been limited to the position of CEO. In its most recent annual report (for 2018-19, published in late 2019) Sassa reported that five of the top ten executive positions in the national office (including the position of CEO) were or had been vacant, as were six of nine top positions in Sassa’s regional offices.
Nor does recent experience in paying social grants inspire full confidence in Sassa. At the beginning of May, Sassa tried to pay its social grants in two phases, to reduce crowds at ATMs and retailers. At the same time it had to pay the supplements to existing grants announced by the president in April.
In KwaZulu-Natal, more than 470,000 elderly and disabled people did not receive their grants on the Monday, due to a ‘system glitch’. In the Western and Northern Cape, as many as 600,000 pensioners received double payments. Instead of receiving R2,110 — the regular R1,860 per month plus the R250 Covid-19 supplement — beneficiaries received R4,220! Sassa tried to reverse payments as soon as it discovered the technical error — without success, it seems. These double beneficiaries were warned through the media that they would not receive a social grant payment for June 2020.
Sassa’s CEO attributed these ‘glitches’ to the change from paying all grants simultaneously to paying them in two phases. She proceeded to assure grant recipients “that we have double checked the system and that going forward everyone will receive their money on time”. It seems that she was correct: Sassa officials tell me that there were no further glitches in the payment of grants.
Sassa expects most beneficiaries of the new grant to be paid through bank accounts with the banks or Post Office, as is the case with the existing social grants. At a press conference, Sassa’s CEO pointed to the Mzansi accounts operated by the Post Office (through Postbank, where she was previously CEO). Pick ’n Pay and many other institutions now offer accounts that can be opened easily and cheaply.
In an innovation, Sassa also announced that payments could be made to anyone without a bank account through cash-sending platforms such as First National Bank’s e-wallet or Absa’s CashSend. Sassa later explained that approved applicants for the new grant would receive instructions on their phones and could then withdraw cash from any ATM.
Sassa has also emphasised that applicants will only be asked for banking details — to be entered through a secure website — after their applications have been approved.
Within three days Sassa had received more than three million applications, though many of these will not be approved. Sassa officials generally say that they expect to approve about six to seven million applications. This seems an implausibly low estimate. I previously calculated that the number of adults without formal employment or any other income could be as high as 20 million.
In Namibia, the number of approved applications by April 30 was already more than half of the country’s economically active population and was far in excess of the total number of unemployed people (according to data from labour market surveys and the official ILO definition of unemployment). Sassa would be wise to anticipate a similarly large wave of applications in SA.
The importance of getting it right
Many South Africans have no income. After almost two months of lockdown, the UIF has begun to pay out significant sums to former contributors. President Ramaphosa stated on May 13 that the UIF had paid out over R11bn to two million workers at 160,000 distressed companies. The UIF announced that more than 600,000 domestic workers might be eligible for payments from the UIF (though it is not clear how long the process would take). Twelve million recipients of existing social grants received a total of about R5bn, on top of their usual grants, at the beginning of May.
The new grant would redistribute almost as much as the supplement to existing grants: R4bn per month if paid to six million people, or more than R8bn per month if paid to twelve million people (which is the same proportion of the SA population as the proportion of the Namibian population receiving their emergency grants). If the grant was paid to 20 million South Africans, the total bill would be much larger — at R13bn per month — far exceeding the budget announced by the government. A sum of R4bn might not seem like much, but even this would be significant, since the grant is being paid to people with no other income.
When Sassa does succeed in paying out the new grant, it will initiate a key pillar in SA’s efforts to reduce poverty during the lockdown.
Jeremy Seekings is a professor and director of the Centre for Social Science Research at the University of Cape Town. This article was first published by GroundUp